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Activity-based costing uses the term ‘cost driver’. What is this?

Activity-based costing uses the term ‘cost driver’. What is this? (a) An instruction from management to reduce operating costs. (b) An activity which generates a cost. (c) A fixed overhead absorption technique. (d) A convenient point in a costing system for the collection of costs.

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Question ajoutée par Utilisateur supprimé
Date de publication: 2013/09/03
Khaled Abdelrehim ACCA DipIFR CMA
par Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company

(b) An activity which generates a cost.

Hassan Abbas awan
par Hassan Abbas awan , Senior Accountant , Green Valley premium hyper maket

B is a right Answer

Prince Ninan
par Prince Ninan , Audit Executive , Lewis & Pecker

An activity which generates a cost.

Utilisateur supprimé
par Utilisateur supprimé

(c) A fixed overhead absorption technique.

Utilisateur supprimé
par Utilisateur supprimé

(b) An activity which generates a cost.In ABC Costs are traced to products through activities which consumes the resources and these activities and resources uses cost drivers to attach costs to cost objects

sasibhooshan pournami
par sasibhooshan pournami , Finance Manager , COMAT INDUSTRIES LLC

cost driver is any factor which causes a change in the cost of an activity. A cost driver is the unit of an activity that causes the change in activity's cost. 

B is the right answer

Khalid Noor
par Khalid Noor , Accounting Manager , FedEx

B is correct, not C

Virendra Rathore
par Virendra Rathore , Senior Executive Accounts , Impetus Infotech India Private Limited

"B" is the right number

Ahmed Abd Alwahab Awad Ibrahim
par Ahmed Abd Alwahab Awad Ibrahim , Chief Accounting , ICCDP

Number B is the right answerb) An activity which generates a cost.

Kamran Anjum
par Kamran Anjum , Head of Internal Audit , Rafhan Maize Products Company limited, Faisalabad, Pakistan, Ingredion Incorporated Gmbh

Option (B) is the right answer

Merlyn Santos
par Merlyn Santos , Accounts Supervisor , Atone Electro Mechanical Services Est.

(b) An activity which generates a cost.

Activity cost drivers are associated with the managerial accounting concept of activity based costing where job activities are divided in to cost pools based on their cost driver in an effort to properly allocate indirect costs to products based on the amount of activities required to produce them. The cost driver can be anything in the pool that causes the cost of the activities to increase or decrease.

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